Big cut back at AA

[luvthe9]

http://www.reuters.com/article/marketsNews...20080521?rpc=44

 

[prechilill]

http://www.reuters.com/article/marketsNews...20080521?rpc=44

AMR at least has pretty good management and a solid product compared to the competition to weather this storm. Our product is typical Parkeresque- even with good on time performance we have record customer complaints. Tempe can't figure out how to take care of its customers. Nothing new. Cuts are coming. PIT and LAS are just the beginning. Parker inherited a high cost structure and three years into this merger the only thing that has fallen through the floor is the USAirways image. Let's send that CEO a bonus!

 

[sharktooth]

Parker inherited a high cost structure and three years into this merger the only thing that has fallen through the floor is the USAirways image.

It would be more correct and less confusing to say that Parker inherited a profitable yield structure, which would include a high cost structure, as you said, but also include a higher (relatively) revenue structure.

I realize you might have been sarcastic, but, just wanted to clarify the situation.

 

[gaucho99]

Wow - AA will start charging $15 for your first checked bag. I wonder if others will follow suit?

 

[hp-csr-phx]

At what price of jet fuel does it become more cost effective to ground the 50 seat RJ's? I know we have to pay for them, but is the revenue enough to even cover the fuel cost?

 

[cynic]

I wasn't aware you were a mod?

I think it is relative in wondering if US is next

You haven't realized that many of the members here live to second guess and criticize the decisions other people make?

On topic:
Cuts will be made by everyone other than Southwest who is going to use their hedging position to destroy the industry.

 

[beachboy]

Absent bankruptcy the East still has minimum mainline fleet count correct? If LCC downsized where would the cuts come from?

 

[Elevation]

Absent bankruptcy the East still has minimum mainline fleet count correct? If LCC downsized where would the cuts come from?

It's a minimum fleet but they could cut utilization by several hours a day, therefore layoffs/furloughs would happen. Wait for it.

 

[Travelpro72]

Well they'd have to offer the east f/a's voluntary first before invol furloughs. SIGN ME UP! ! !

 

[EastUS]

Absent bankruptcy the East still has minimum mainline fleet count correct?

Correct. What/which aircraft might be parked for starters, and how much in the way of overall reductions may eventually occur is anyone's guess at this point though. I'd think it dependant on relative worth of the various routes/etc. We'll just have to see how bad things actually get....pretty much the usual story...

 

[Pacemaker]

It would be more correct and less confusing to say that Parker inherited a profitable yield structure, which would include a high cost structure, as you said, but also include a higher (relatively) revenue structure.

I realize you might have been sarcastic, but, just wanted to clarify the situation.

It stuns me how people seem to have just blanked out the period from 1990-2005. US Airways lost money 2 out of every 3 years totalling 5 billion dollars for nearly two decades leading up to the merger. The yields may have been high but costs outpaced them. A big infusion of equity via the merger and a couple of good years for the industry does not change the fact that Parker did not inherit anything close to a profitable business model.

 

[Be Careful What You Wish For.]

It's called "Rose Colored Glasses" as opposed to "KoolAid".

Still have the highest costs after 2 BKs.

I'm sure someone will correct me-if I'm wrong.

 

[BuffaloJoe]

US Airways Studies AA's Baggage Fee

Now it belongs here!

 

[songbirdstew]

Perhaps now they will consider offering a decent buy out to down-size instead of offering chicken feed for the years of service so many have spent here. Just my opinion.

 

[luvthe9]

OIL over 132 a barrel, company might use "force majure" and cut way below min fleet size. I think they can still do that but not sure>